When there are no differences among countries in the basic capabilities at producing goods, other bases for trade among them may still exist. First, patterns of demand may ( 1 ) among nations. For example, most consumers in ( 2 ) country may consider dog meat a delicacy, ( 3)in another country the consumption of dog meat is disgusting. In this case the second country may sell its dog meat to the first country. Trade will be ( 4 ) not on differences in the production capabilities of the two countries ( 5 ) on different consumption preferences.Second, trade may occur out of economies of scale, ( 6 ) , the cost advantages of large-scale production. For example, Country A and Country B may have the same capability in producing cars and computers, but the cost for the production of both commodities will ( 7) ifthe goods are produced on a larger scale. ( 8 ) countries may find it advantageous if each(9 ) to specialize completely in the production of one commodity and import the other.( 10 ) , trade takes place because of innovation or style. Even though Country A produces enough cars at reasonable costs to meet its own ( 11 )and even to export some, it may( 12) import cars from other countries for innovation or variety of style.To ( 13 ) , the theory of international specialization seeks to answer the ( 14 )which countries will produce what goods, with what trade patterns among them. Differences in production conditions, the element highlighted by the theory of comparative advantage, provide the most important part of the answer. But a complete answer must also(15) into account other factors such as patterns of demand, economies of scale and innovation or style.

1.A. differ B. offerC. refer D. infer

2. A. the B. oneC. an D. that

3. A. so B. ifC. while D. when

4. A. basis B. basedC. basic D. basement

5. A. and B. orC. however D. but

6. A. for example B. in this caseC. so that D. that is

7. A. increase B. raiseC. decrease D. reduce

8. A. Both B. NeitherC. Either D. All

9. A. is B. wereC. was D. be

10. A. Firstly B. SecondlyC. Thirdly D. Third

11. A. demand B. supplyC. standard D. level

12. A. yet B. thusC. still D. instead

13. A. add B. summarizeC. include D. contain

14. A. issue B. problemC. subject D. question

15. A. take B. makeC. fake D. shake